SAVINGS PLANFOR
EMPLOYEES OF NL INDUSTRIES, INC.
Effective as of January 1, 1989
PREAMBLE
The Plan is a successor plan to the former “Savings Plan for Employees of NL Industries, Inc
which is referred to herein as the “Predecessor Plan.” In connection with the Plan of
Restructuring NL Industries, Inc. which was approved by shareholders on December 22, 1988,
the Predecessor Plan was renamed the Savings Plan for Employees of Baroid Corporation and
adopted and assumed by Baroid Corporation. Pending the implementation of the Plan, eligible
employees of NL Industries, Inc. and subsidiaries formerly eligible to participate in the
Predecessor Plan continued to participate in the Predecessor Plan. The Plan was established as of
January 1, 1989 to permit eligible employees of NL Industries, Inc. and participating subsidiaries
to continue their participation in a tax-qualified savings plan. The Plan includes amendments
which reflect the restructuring and other changes which were communicated to eligible
employees in November of 1988. Accordingly, the Plan governs the rights and obligations of the
Company and Plan participants for all periods on and after January 1, 1989, except with respect
to participants’ accounts held in Investment Funds of the Predecessor Plan pending their transfer
to the Plan. All participants who were participants under the Predecessor Plan automatically
became participants under the new Plan. Account balances under the Predecessor Plan will be
transferred to the Plan as soon as practicable after the implementation of the Plan.
ARTICLE I. PURPOSE
1.1 The purpose of the Savings Plan for Employees of NL Industries, Inc. is to provide
eligible employees with a convenient way to save on a regular and long-term basis by providing
such employees with a beneficial interest in the profits of the business, all as set forth herein and
in the Trust Agreement adopted in connection with the Plan. The Plan and its related Trust are
intended to qualify as a plan and trust which meet the requirements of Sections 401(a), 401(k)
and 501(a), respectively, of the Internal Revenue Code of 1986, as now in effect or hereafter
amended, other applicable provisions of law including, without limitation, the Employee
Retirement Income Security Act of 1974, as now in effect or hereafter amended.
ARTICLE II. DEFINITIONS
As used in the Plan, the following terms shall have the following meanings: 2.1 “Affiliated Company” means any business entity which (i) is included within a controlled
group of corporations within which the Company also is included, (ii) is under common control
with the Company, or (iii) is included within an affiliated service group within which the
Company is also a member, all as determined under Sections 414(b), (c) and (m) of the Code,
respectively; provided however, that for purposes of determining the annual contribution
limitations set forth in Article XIV, such determination shall be made in accordance with Section
415(h) of the Code.
2.2 “Authorized Leave of Absence” means any absence from employment:
(a) Authorized by the Committee for education purposes or by reason of family obligations,
sickness, short term disability, accident or emergency; or
(b) On account of a period of military service required by law or under leave granted by the
Committee, provided the Employee returns to employment with Company or an Affiliated
Company within 90 days after his separation from active duty or within such longer period
during which his right to reemployment is legally protected.In granting leaves of absence, the Committee shall accord like treatment to all Participants in
similar circumstances.
2.3 “Basic Contributions” means the aggregate of a Contributing Participant’s Basic After-
Tax Contributions and Basic Pre-Tax Contributions as defined in Paragraphs 2.4 and 2.5,
respectively.
2.4 “Basic After-Tax Contributions” means that part of a Contributing Participant’s
Compensation which he contributes to the Trust Fund on an after-tax basis, as provided in
Paragraph 4.1 hereof.
2.5 “Basic Pre-Tax Contributions” means that part of a Contributing Participant’s
Compensation which he elects to reduce in accordance with Paragraph 4.2 hereof and have
contributed to the Trust Fund on his behalf by his Employer on a pre-tax basis, in compliance
with the provisions of Section 401(k) of the Code.
2.6 “Beneficiary” means the Spouse of the Participant if surviving; provided, however, that if
there is no surviving Spouse or if the surviving Spouse cannot be located, the person or persons
designated by the Participant in the form of a Qualified Election, as such term is defined in
Paragraph 2.31, to receive any death benefit payable hereunder. A Participant may also designate
any person or persons as his Beneficiary in the form of a written designation to receive any death
benefit payable hereunder, provided he obtains the notarized written consent of his Spouse. A
Participant may revoke or change his Beneficiary designation only with the consent of the
Spouse by filing a revised designation with the Committee. The last such designation received by
the Committee shall be controlling; provided, however, that no designation, change or revocation
thereof, shall be effective unless received by the Committee prior to the Participant’s death, and
in no event shall it be effective as of a date prior to such receipt. In the absence of an effective
designation or if no named beneficiary shall survive the Participant, the Beneficiary shall be the
Participant’s Spouse, or, if there is no Spouse, then the following persons (if then living) in the
following order of priority: (i) children, in equal shares, (ii) parents, in equal shares, (iii) the
persons designated as beneficiary under the group life insurance plan of the Employer, and (iv)
the Participant’s estate. If the Committee is in doubt as to the right of any person to receive such
amount, the Committee may direct the Trustee to retain such amount, without liability for any
interest thereon, until the rights hereto are determined, or the Committee may direct the Trustee
to pay such amount into any court of appropriate jurisdiction and such payment shall be a
complete discharge of the liability of the Plan and the Trust therefor,
2.7 “Board” means the Board of Directors of the Company as constituted from time to time.
2.8 “Break in Service” means any Plan Year during which an Employee fails to receive credit
for at least three (3) Months of Service or 501 Hours of Service, except that Break in Service
shall not be deemed to occur on account of any Authorized Leave of Absence Solely for
purposes of determining whether Break in Service has occurred in any Plan Year, an Employee
who is absent from work on account of a “maternity or paternity absence” shall be credited with
the number of Hours of Service which would have been completed but for such absence, or, if
the Committee is unable to determine such Hours of Service, eight Hours of Service for each day
of such absence; provided, however, that no more than 501 hours shall be credited hereunder on
account of any such absence, and further provided that the Employee furnishes to the Committee
such timely information as may be required by the Committee to properly administer this
provision. Hours of Service for a “maternity or paternity absence” shall be credited entirely in
the Plan Year in which the absence begins if necessary to prevent the occurrence of a Break in
Service in such year, or, in any other case, in the immediately following Plan Year. A “maternity
or paternity absence” shall mean any absence from work by reason of the Employee’s
pregnancy, the birth of the Employee’s child, the placement of a child with the Employee in
connection with the adoption of such child by the Employee, for purposes of caring for any such
child for the period immediately following such birth or placement.2.9 “Code” means the Internal Revenue Code of 1986, as now in effect or as hereafter
amended. All citations to sections of the Code are to such sections as they may from time to time
be amended or renumbered.
2.10 “Committee” means the Pension and Employee Benefits Committee of NL Industries,
Inc. as established in accordance with Article XI hereof.
2.11 “Common Stock” means the presently authorized common stock, par value $.125 per
share, of NL Industries, Inc., a New Jersey corporation, as adjusted for stock splits, stock
dividends, reclassifications and similar changes affecting such shares, or other common stock
with voting power and dividend rights no less favorable than the voting power and dividend
rights of the presently authorized common stock of NL Industries, Inc. Solely with respect to
common stock of Baroid Corporation which was allocated to the accounts of Employees of the
Company or its Affiliated Companies as a result of the Plan of Restructuring and which
Participants to whose accounts such stock was allocated elected to retain in lieu of exchanging it
for common stock of the Company, Common Stock also means the presently authorized common
stock, par value $.10 per share, of Baroid Corporation, a Delaware corporation, as adjusted for
stock splits, stock dividends, reclassifications and similar changes affecting such shares, or other
common stock with voting power and dividend rights no less favorable than the voting power
and dividend rights of the presently authorized common stock of Baroid Corporation.
2.12 “Company” means NL Industries, Inc. and any person, firm or corporation which
hereafter may succeed to the interests of said company by merger, consolidation or otherwise
and which, by appropriate action, shall adopt the Plan. 2.13 “Compensation” means the first $200,000 (adjusted for cost of living to the extent
permitted by the Code and the Regulations) of all renumeration paid to an Employee by his
Employer during a Plan Year which is received during the period that such Employee is eligible
to become a Contributing Participant in the Plan under the provisions of Paragraph 3.1, and
which is subject to withholding for federal income tax purposes, or would have been paid and
been subject to withholding if the Employee (i) had not made any Basic Pre-Tax Contributions
as defined in Paragraph 4.2 or Supplemental Pre-Tax Contributions as defined in Paragraph 4.3
hereof. (ii) had not elected to have his salary reduced to fund contributions to a plan maintained
by his Employer pursuant to Section 125 of the Code, or (iii) was employed in the United States.
compensation shall not include relocation allowances, the imputed value of group life insurance,
tuition refunds, foreign service premiums and other similar foreign service adjustments, and any
income attributable to stock options, stock appreciation rights, performance award rights (other
than performance award rights which are in the nature of an annual bonus award) or other similar
cash or non-cash fringe benefits and perquisites. To the extent that the remuneration of any
Employee is paid in a foreign currency, such amount shall be converted to United States Dollars
at a rate to be determined by the Committee and uniformly applicable to all Employees paid in
such currency at such time.
2.14 “Contributing Participant” means any Employee who elects to become a Participant in
the Plan pursuant to Article III hereof and who is making Basic Contributions to the Trust Fund
in accordance with Article IV hereof.
2.15 “Contract” means one or more guaranteed investment contracts described in Paragraph
6.1 (a) hereof.
2.16 “Disability” means, with respect to any Participant, the inability of such Participant to
perform the normal duties of his employment for which he is qualified by training or experience,
and which qualifies such Participant for a benefit under the Long Term Disability Plan and/or the
Social Security Act. The Committee may secure qualified medical advice and may require the
Participant to submit to a physical examination in determining Disability hereunder.
2.17 “Employee” means any person employed by the Employer except:
(a) any person, other than a person whose conditions of employment currently are covered
by a collective bargaining agreement, whose compensation is computed on an hourly, daily,
piecework or other comparable basis, or any person who is a “leased employee” as defined in
Section 414(n) of the Code, unless such person or leased employee is included within a class of
employees which is designated by the Board as eligible to participate in the Plan and is not
otherwise excluded from participation under subparagraphs (c) or (d) below;
(b) any person whose conditions of employment currently are covered by a collective
bargaining agreement to which the Employer is a party, unless the Employer and the bargaining
agent have come to agreement as to the inclusion of such person under the Plan;
(c) any person who is or becomes a participant under any other profit sharing, savings or
similar type defined contribution plan (excluding a tax credit employee stock ownership plan)
maintained by an Employer or any other nonparticipating Affiliated Company; and
(d) any person employed by an Affiliated Company which is not organized under the laws of
the United States, or any State, or the District of Columbia, unless such person is a citizen of the
United States or has been designated as an Employee, either individually or by employment
classification, by the Committee in accordance with guidelines established by the Committee.
2.18 “Employer” means the Company, NL Chemicals, Inc. and any other Affiliated Company
which is designated by the Board as an Employer under the Plan and whose designation as such
has become effective and continues in effect. The Board may revoke the designation of an
Affiliated Company as an Employer at any time, but the provisions of the Plan shall otherwise
continue to govern the rights and obligations of Participants of that Employer and their
Beneficiaries after such revocation. When used in reference to Employer Contributions for a
Contributing Participant, the term “Employer” shall refer to the Employer employing such
Contributing Participant. When the term “Employer” is used in reference to the collective
obligations of all Employers adopting the Plan, the obligations of each such Employer shall be
proportionate to the contributions of its Contributing Participants to the Plan. Each Employer
appoints the Company and the Committee as its agents to act for it in all matters relating to the
Plan and Trust, and agrees to furnish to the Committee such information which may be necessary
for the proper administration of the Plan.
2.19 “Employer Contributions” means the amount which the Employer shall contribute to the
Trust Fund as provided in Article V hereof.
2.20 “ERISA” means the Employee Retirement Income Security Act of 1974, as now in effect
or hereafter amended.
2.21 “Highly Compensated Employee” or “Highly Compensated Participant” means an
Employee or Participant who, during the relevant period is treated as a highly compensated
employee under Section 414(q) of the Code.
2.22 “Hour of Service” means:
(a) each hour for which an Employee is paid or entitled to payment for the performance of
duties for the Employer or an Affiliated Company during the Plan Year;
(b) each hour for which an Employee is paid or entitled to payment by the Employer or an
Affiliated Company during the Plan Year on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury duty, or an Authorized
Leave of Absence; provided, however, that an Hour of Service shall not include any hour during
which no duties are performed and for which payment is made solely for the purpose of
complying with applicable worker’s compensation, unemployment compensation or disability
insurance laws; and
(c) each hour for which back pay, irrespective of mitigation of damage, has been either
awarded or agreed to by the Employer or an Affiliated Company (these hours shall be credited to
the Employee for the computation period or periods to which the award or agreement pertains
rather than the computation period in which the award agreement, or payment was made.
Hours of Service credited for reasons other than the performance of duties shall be computed and
credited to computation periods in accordance with paragraghs (b) and (c) of Section 2530.200b-
2 of the Department of Labor Regulations. Hours of Service shall be credited for any person
considered a “leased employee” as defined in Section 414(n) of the Code, regardless of whether
such person is an Employee; provided, however, that no such “leased employee” shall participate
in the Plan except as provided in subparagraph (a) of Paragraph 2.17.
2.23 “Investment Funds” means the funds in which the Trust Fund is invested by the Trustee
in accordance with the provisions of Article VI hereof.
2.24 “Long Term Disability Plan” means the long term disability plan of the Company, as
amended from time to time, which covers enrolled Employees.
2.25 “Month of Service” means each calendar month during which an Employee or “leased
employee” is entitled to credit for at least one Hour of Service. For purposes of the Plan, credit
for one Month of Service shall be the equivalent of having been credited with 190 Hours of
Service during the relevant calendar month, Months of Service shall include each calendar month
of service with Baroid Corporation after the approval of the Plan of Restructuring provided such
service would have been credited as a Month of Service if Baroid Corporation had been an
Affiliated Company during such period. Months of Service also shall include service
accumulated with certain predecessor employers if, and to the extent, authorized by the Board.
The Committee shall credit Months of Service under the preceding two sentences in accordance
with nondiscriminatory rules of uniform application.2.26 “Participant” means an Employee who satisfies the eligibility requirements of Article III
hereof and who maintains an account balance in the Trust Fund, regardless of whether such
Employee is a Contributing Participant.
2.27 “Plan” means the Savings Plan for Employees of NL Industries, Inc., as may be
subsequently amended or restated from time to time,
2.28 “Plan Year” means each calendar year.
2.29 “Predecessor Plan” means the Savings Plan for Employees of Baroid Corporation as in
effect on December 31, 1988 and as thereafter amended to incorporate changes (i) approved by
the Board with respect to NL Industries, Inc. participants or (ii) otherwise required to be made
effective prior to such date to comply with the amendments to applicable law.
2.30 “Profitability Level” means the level and measurement of profitability which are
approved by the Board with respect to the relevant Plan Year.
2.31 “Qualified Election” shall mean an election made by a Participant in writing and
consented to by the Participant’s Spouse in writing. The Spouse’s consent must acknowledge the
effect of such election and must be witnessed by a member of the Committee, a local employee
relations manager or a notary public. Notwithstanding the preceding sentence, consent of the
Spouse shall not be required if the Participant establishes to the satisfaction of the Committee
that there is no Spouse or that the Spouse cannot be located, Except as otherwise provided in
Paragraph 2.6, a Participant may revoke a prior election without the Spouse’s consent at any time
before the commencement of benefits. The number of elections and revocations shall not be
limited.
2.32 “Regulations” means the applicable regulations issued under the Code, ERISA or other
applicable law by the IRS, the Labor Department, or any other governmental authority or any
temporary regulations or rules promulgated by such authorities pending the issuance of such
regulations.
2.33 “Retirement” means, in the case of a Participant eligible for a then current pension under
the provisions of any formal retirement plan of the Company, the termination of employment by
the Participant due to actual retirement in accordance with the provisions of such plan, and in the
case of any other Participant not covered by a formal retirement plan of the Company, such
Participant’s termination of employment in accordance with rules, of uniform application
maintained by the Company.
2.34 “Spouse” means the person to whom the Participant was legally married, as determined
by the Committee, for at least 31 days immediately preceding the earlier of either (a) the date on
which the Participant terminates employment under the Plan due to Retirement (or is deemed to
have so terminated his employment) or (b) the Participant’s death; provided, however, that a
former Spouse will be treated as a Spouse to the extent provided under a qualified domestic
relations order as described in Paragraph 16.2.
2.35 “Supplemental Contributions” means the aggregate of a Contributing Participant’s
Supplemental After-Tax and Supplemental Pre-Tax Contributions, as defined in Paragraphs 2.36
and 2.37, respectively.
2.36 “Supplemental After-Tax Contributions” means that part of a Contributing Participant’s
Compensation in excess of his Basic Contributions, which he contributes to the Trust Fund on an
after-tax basis as provided in Paragraph 4.3 hereof.
2.37 “Supplemental Pre-Tax Contributions” means that part of a Contributing Participant’s
Compensation which he elects to reduce in accordance with Paragraph 4.3 hereof and have
contributed to the Trust Fund on his behalf by his Employer on a pre-tax basis, in compliance
with the provisions of Section 401 (k) of the Code.
2.38 “Trust” means the trust established pursuant to and forming part of the Plan for the
investment, reinvestment and administration of contributions under the Plan,
2.39 “Trustee” means the bank, trust company or national banking association having trust
powers designated as Trustee of the Trust under an agreement between the Company and such
bank, trust company or national banking association,
2.40 “Trust Fund” means the “trust fund described in Article XII hereof.
2.41 “Valuation Date” means the last business day of any calendar month or such other date or
dates as may be determined by the Committee.
2.42 “Vesting Service” means service described in Paragraph 8.3 hereof.
ARTICLE III. ELIGIBILITY FOR PARTICIPATION
3.1 Eligibility.
(a) Each Employee who was a contributing participant in the Predecessor Plan on December
31, 1988 shall continue as a Contributing Participant under the provisions of the Plan. Each other
Employee shall be eligible to participate in the Plan as a Contributing Participant on the first day
of the pay period coincident with or next following the date on which he shall have performed at
least 1000 Hours of Service or six Months of Service, provided he shall have performed such
service within a single “eligibility computation period.” An Employee’s “eligibility computation
period” shall be the 12-month period commencing with his date of employment or, if the
Employee fails to satisfy the requirements of this subparagraph (a) during such period, any Plan
Year following his date of employment.
(b) Notwithstanding subparagraph (a) immediately above or any other provision of the Plan
to the contrary, an Employee who would otherwise be eligible to participate in the Plan but for
his failure to satisfy the service requirement under subparagraph (a) may make, with the consent
of the Committee, a Rollover Contribution (as defined in subparagraph 4.10(b)) or a direct
transfer to the Trust Fund (as described in subparagraph 4.10(c)) in accordance with the
procedures set forth in subparagraph 4.10(a). En the event the Committee permits an Employee
to make such a Rollover Contribution or direct transfer to the Trust Fund, the Committee shall
cause the Trustee to establish a separate account for such Employee in accordance with
procedures set forth in Article VII hereof and shall invest the Rollover Contribution or
transferred cash in the manner set forth in Paragraph 6.1 in accordance with instructions
submitted in writing to the Committee by the Employee. In the event the Employee terminates
employment with the Employer prior to becoming a Contributing Participant under the Plan,
such separate account shall be distributed to him in the form of a lump sum payment in the
manner and at the time prescribed in subparagraph 9.1(a).(c) Notwithstanding subparagraph (a) or any other provision of the Plan to the contrary, an
Employee who qualifies as such under subparagraph 2.17(d) or any other nonresident alien or
expatriate shall not be eligible to make Basic Pre-Tax Contributions as defined in Paragraph 2.5,
unless otherwise determined by the Committee in its sole discretion.
3.2 Method of Becoming a Contributing Participant. An Employee who is eligible to become
a Contributing Participant in the Plan under the provisions of Paragraph 3.1 shall do so by
completing and delivering to the Committee at least 15 days before the date of desired
participation, a written statement:
(a) enrolling as a Contributing Participant:
(b) electing the initial rate of his Basic and Supplemental Contributions under Article IV;
(c) stipulating the Investment Fund(s) to which his contributions and the Employer
Contributions should be allocated as set forth in Paragraph 6.1; and
(d) providing such other information as the Committee may require.
Each Employee who does not become a Contributing Participant when first eligible to do so may
become a Contributing Participant as of the first day of any pay period thereafter by complying
with the provisions of this Paragraph 3.2.
3.3 Termination of Participation in the Plan. Participation in the Plan shall cease in the case
of any Participant whose entire account balance is distributed. Any person whose participation is
terminated pursuant to the preceding sentence may resume participation in the Plan as of the first
day of the pay period coincident with or next following the date he again becomes an Employee,
provided he satisfies the requirements of Paragraph 3.2. Participation in the Plan shall continue
in the case of any Participant who, upon termination of employment for any reason (including
Disability or Retirement), or in the case of any Beneficiary who, upon the death of the
Participant, elects to receive a distribution in a form that would maintain an account balance in
any one or more of the Investment Funds after termination of employment. Such person shall
remain a Participant or, in the case of a Beneficiary, be deemed a Participant herein, but not a
Contributing Participant, until such time as the distribution in full has been made to him. Any
person whose participation is continued under this Paragraph 3.3 shall continue to participate in
Investment Fund performance but shall be prohibited from making any further contributions to
the Trust Fund unless he is reemployed, in which event again he shall be eligible to become a
Contributing Participant herein.
3.4 Intra-Company Transfers. Termination of employment shall not be deemed to occur by
reason of:
(a) transfer in employment from one Employer to another Employer:
(b) transfer in employment from an Employer to any Affiliated Company not participating in
the Plan or to a class of employees (including “leased employees” as defined in Section 414(n) of
the Code) which is ineligible to participate in the Plan; or
(c) transfer in employment from any Affiliated Company not participating in the Plan or
from a class of employees (including “leased employees” as defined in Section 414(n) of the
Code) which is ineligible to participate in the Plan to an Employer or class of eligible Employees
hereunder.
Except as provided in Paragraph 10.1, for purposes of subparagraph (b). a Participant shall
remain a Participant for all purposes of the Plan herein, except that he shall not be eligible to be a
Contributing Participant for the period of time during which he is employed by an Affiliated
Company which is not participating in the Plan or during which he is part of a class of employees
which is ineligible to participate in the Plan. For purposes of subparagraph (c), employment with
an Affiliated Company which is not participating in the Plan or as an employee ineligible to
participate in the Plan ‘shall count as Hours of Service and Months of Service toward satisfying
the requirement of Paragraph 3.1.
ARTICLE IV. PARTICIPANT CONTRIBUTIONS
4.1 Amount of Basic After-Tax Contributions Subject to the provisions of Paragraph 5.2(c)
(i) and Article XIV, any Employee who is, or is eligible to become, a Contributing Participant
may make through payroll deductions, Basic After-Tax Contributions, for any Plan Year, equal
to any percentage of his Compensation, in increments of 0.5%, from 1% up to and including 8%
(or such other maximum amount as may be established by the Committee) less the percentage of
Compensation elected as Basic Pre-Tax Contributions pursuant to Paragraph 4.2, if any.
4.2 Amount of Basic Pre-Tax Contributions. Subject to the provisions of Paragraph 4.5, and
Article XIV, any Employee who is, or is eligible to become, a Contributing Participant may
elect, in accordance with procedures adopted by the Company, to reduce his Compensation by an
amount equal to any percentage, in increments of 0.5%, from 1% up to and including 8%, or
such other maximum amount as may be established by the Committee; provided, however, that
the maximum amount elected as Basic Pre-Tax Contributions in no event shall exceed the
difference between (1) 8% and (or such other maximum amount as may be established by the
Committee) (ii) the percentage of Compensation elected as Basic After-Tax Contributions
pursuant to Paragraph 4.1, if any. Subject to subparagraph 4.5(b), the amount of any such
reduction shall be contributed to the Plan as Basic Pre-Tax Contributions on behalf of such
Contributing Participant by his Employer. Notwithstanding the foregoing, Basic P-e-Tax
Contributions in any calendar year shall not exceed the limitation on elective deferrals under
Section 402(g)(1) of the Code, adjusted for increases in the cost of living in accordance Section
402(g)(5) of the Code. In the event that the aggregate amount of Basic Pre-Tax Contributions
for a Participant exceeds the limitation in the previous sentence, the amount of such excess,
increased by any income and decreased by any losses attributable thereto, shall be refunded to
the Participant no later than the April 15 th
of the calendar year following the calendar year for
which the Basic Pre-Tax Contributions were made. If a Participant also participates, in any
calendar year, in any other plans subject to the limitations set forth in Section 402(g) of the Code
and has made excess deferrals under this Plan when combined with the other plans subject to
such limits, to the extent the Participant, in writing submitted to the Committee no later than the
March 1 of the calendar year following the calendar year for which the Basic Pre-Tax
Contributions were made, designates any Basic Pre-Tax Contributions under this Plan as excess
deferrals, the amount of such designated excess, increased by any income and decreased by any
losses attributable thereto, shall be refunded to the Participant no later than the April 15 of the
calendar year following the calendar year for which Basic Pre-Tax Contributions were made.4.3 Supplemental Contributions. Subject to the provisions of Article XIV, a Participant who
is an Employee and whose Basic Contributions are at least 8% may elect to make Supplemental
After-Tax or Supplemental Pre-Tax Contributions. Supplemental After-Tax Contributions shall
be made through payroll deductions. Supplemental Pre-Tax Contributions shall be made in
accordance with procedures adopted by the Company. Supplemental Contributions are not
matched by the Company. The amount of a Contributing Participant s Supplemental
Contributions may be made in increments of 0.5% from 1% to 4% of Compensation or such
other maximum amount as may be established by the Committee.
If Basic Contributions are reduced below 8%, a Participants Supplemental Contributions will be
suspended. Such Supplemental Contributions may resume once Basic Contributions equal at
least 8%.
4.4 Separate Accounting. The Committee and the Trustee shall be responsible for
maintaining separate records of the Basic After-Tax and Pre-Tax Contributions, Supplemental
After-Tax and Pre-Tax Contributions and Rollover Contributions made by or on behalf of the
Participant and paid the Trustee. All amounts contributed by or on behalf of the Participant to the
Trust Fund with respect to any pay period shall be allocated to the Participant’s account as soon
as practicable after the end of the pay period in respect of which the payroll deductions, salary
reductions or cash payments are effectuated.
4.5 Special Provisions Related to Basic and Supplemental Pre-Tax Contributions
(a) Basic and Supplemental Pre-Tax Contributions, including increments earned thereon,
shall be fully vested at all times and may not be withdrawn by or distributed to a Participant,
except as permitted by an election made pursuant to Section 9.6, until the earliest to occur of his
Retirement, death, Disability, separation from service, attainment of age 59½ or hardship.
(b) (i) Notwithstanding any other provision of this Article IV, the actual deferral percentage for
the Plan Year for Highly Compensated Employees shall not exceed the greater of the following
actual deferral percentage tests: (a) the actual deferral percentage for such Plan Year of those
eligible Employees who are not Highly Compensated Employees multiplied by 1.25; or (b) the
actual deferral percentage for the Plan Year of those eligible Employees who are not Highly
Compensated Employees multiplied by 2.0, provided that the actual deferral percentage for
Highly Compensated Employees does not exceed the actual deferral percentage for such other
eligible Employees by more than 2 percentage points. For purposes of this Article IV, the “actual
deferral percentage” for a Plan Year means, for each specified group of employees, the average
of the ratios (calculated separately for each Employee in such group) of (a) the amount of the
Participant’s Basic and Supplemental Pre-Tax Contributions for the Plan Year, to (b) the amount
of the Participant’s Compensation (as defined in Section 414(s) of the Code) for the Plan Year.
An eligible Employee’s actual deferral percentage shall be zero if no Basic Pre-Tax Contribution
is made on his behalf for such Plan Year.
(ii) The Committee shall determine as of the end of the Plan Year, and at such time or times
in its discretion, whether one of the actual deferral percentage tests specified in subparagraph
4.5(b)(i) is satisfied for such Plan Year. This determination shall be made after first determining
the treatment of excess deferrals within the meaning of Section 402(g) of the Code under
Paragraph 4.2, In the event that neither of such actual deferral percentage tests is satisfied, the
Committee shall, to the extent permissible under the Code and the Regulations, and to the extent
any such recharacterization would not cause a violation of subparagraph 5,2(a) or, together with
Basic After-Tax Contributions actually made, exceed the limitations on Basic After-Tax
Contributions stated in Paragraph 4.1 determined prior to application of subparagraph 5,2(a), if
the Participant so elects, recharacterize such excess contributions as Basic or Supplemental
After-Tax Contributions, in the manner described in subparagraph 4.5(b) (iii) or, to the extent
such recharacterization is not possible or the Participant does not so elect, refund the excess
contributions in the manner described in subparagraph 4.5(b) (iv). For purposes of this Article
IV, “excess contributions” means, with respect to any Plan Year, the excess of the aggregate
amount of Basic and Supplemental Pre-Tax Contributions (and any earnings and losses allocable
thereto) made on behalf of Highly Compensated Participants for such Plan Year, over the
maximum amount of such contributions that could be made to such Participants without
violating the requirements of subparagraph 4.5(b) (i), determined by reducing Basic and
Supplemental Pre-Tax Contributions made on behalf of Highly Compensated Participants in
order of the actual deferral percentages beginning with the highest of such percentages.
(iii) To the extent provided in subparagraph 4.5(b) (ii), in accordance with the Code and the
Regulations, if a Highly Compensated Participant so elects in writing no later than the 15th day
of the second month immediately following the end of the Plan Year for which such excess
contributions were made, the Committee shall recharacterize excess contributions of such
Participant for a Plan Year as Basic or Supplemental After-Tax Contributions in order to satisfy
the requirements of subparagraph 4.5(b) (1), in which event the amount of excess contributions
so recharactenzed shall, to the extent permitted by the Code and the Regulations, be treated as
having been refunded to the I Participant and then contributed by the Participant as Basic or
Supplemental After-Tax Contributions, as appropriate.
(iv) If a Highly Compensated Participant does not elect recharacterization under subparagraph
4.5(b) (iii), or, if required in order to comply with the provisions of subparagraph 4.5(b)(i), and
the Code, the Committee shall refund excess contributions for a Plan Year. The distribution of
such excess contributions shall be made to Highly Compensated Participants to the extent
practicable before the 15th day of the third month immediately following the Plan Year for
which such excess contributions were made, but in no event later than the end of the Plan Year
following such Plan Year or, in the case of the termination of the Plan in accordance with Article
XIII, no later than the end of the twelve-month period immediately following the date of such
termination. Any such distribution shall be made to each Highly Compensated Participant on the
basis of the respective portions of such amounts attributable to each such Highly Compensated
Participant.
(v) Notwithstanding the foregoing provisions of this subparagraph 4.5(b), the amount of excess
contributions to be recharacterized or distributed pursuant to subparagraph 4.5(b) (iii) with
respect to a Participant for a Plan Year shall be reduced by any excess deferrals previously
distributed to such Participant for such Plan Year.
(vi) Notwithstanding the foregoing provisions of this Paragraph 4.5, excess contributions that are
recharacterized shall then be taken into account for purposes of Paragraph 5.2, shall continue to
be subject to Paragraph 8.1 and Paragraph 10.3, and shall continue to count toward the limits in
Paragraph 14.2. Excess contributions that are refunded shall continue to count toward the limits
in Paragraph14.2.(vii) If an eligible Highly Compensated Employee is subject to the family aggregation rules of
Section 414(q) (6) of the Code because such employee is either a five-percent owner or one of
the ten most Highly Compensated Employees, the combined actual deferral ratio for the family
group (which is treated as one Highly Compensated Employee) shall be the greater of:
(a) the actual deferral ratio determined by combining the Basic and
Supplemental Pre-Tax Contributions, Compensation and amounts treated as Basic and
Supplemental Pre-Tax Contributions of all the eligible family members who are highly
compensated without regard to family aggregation; and
(b) the actual deferral ratio determined by combining the Basic and
Supplemental Pre-Tax Contributions, Compensation and amounts treated as Basic and
Supplemental Pre-Tax Contributions by all the eligible family members.
If the amount determined under (a) exceeds the amount determined under (b), then it may be
necessary, for purposes of correcting excess contributions of the family members under
subparagraph 4.5(b) (viii), to calculate an actual deferral ratio for the eligible family members
who are not Highly Compensated Employees without regard to family aggregation. This actual
deferral ratio is determined by combining the Basic and Supplemental Pre-Tax Contributions,
Compensation, and amounts treated as Basic and Supplemental Pre-Tax Contributions of these
Employees.
The Basic and Supplemental Pre-Tax Contributions, Compensation and amounts treated as Basic
and Supplemental Pre-Tax Contributions of all family members shall be disregarded for the
purpose of determining the actual deferral percentage for the group of eligible Employees who
are not Highly Compensated Employees, except to the extent taken into account above. If an Employee is required to be aggregated as a member of more than one family group in a
plan, all eligible Employees who are members of those family groups that include that Employee
shall be aggregated as one family group.
(viii) The determination and correction of excess contributions of a Highly Compensated
Employee whose actual deferral ratio is determined under subparagraph 4.5(b) (vii) shall be
accomplished as follows: If the actual deferral ratio of the Highly Compensated Employee is
determined under subparagraph 4.5(b) (vii) (b), then the actual deferral ratio shall be reduced as
required under subparagraph 4.5(b) (ii) and the excess contributions for the family unit shall be
allocated among the family members in proportion to the Basic and Supplemental Pre-Tax
Contributions of each family member that are combined to determine the actual deferral ratio. If
the actual deferral ratio of the Highly Compensated Employees is determined under
subparagraph 4.5(vii) (a), then the actual deferral ratio shall be reduced as required under
subparagraph 4.5(b) (ii) in two steps. First, the actual deferral ratio shall be reduced as required
under subparagraph 4.5(b) (ii), but not below the actual deferral ratio of the group of eligible
family members who are not Highly Compensated Employees without regard to family
aggregation. Excess contributions shall be determined by taking into account the contributions of
the family members whose contributions were combined to determine the actual deferral ratio of
the Highly Compensated Employee under subparagraph 4.5(b) (vii) (a), and shall be allocated
among such family members in proportion to each such family member’s elective contributions.
If further reduction of the actual deferral ratio is required under subparagraph 4.5(b) (ii), excess
contributions resulting from this reduction shall be determined by taking into account the
contributions of all eligible family members and shall be allocated among such family members
in proportion to the Basic and Supplemental Pre-Tax Contributions of each family member.4.6 Change in Amount of Basic Contributions. A Contributing Participant may change the
rate of his Basic or Supplemental Contributions for any calendar quarter by filing the appropriate
Plan form with the local administrator at least 15 days prior to the first day of any such calendar
quarter for which the change is intended to be effective. All elections of Basic and Supplemental
Contribution rates made under the Plan shall remain in effect, notwithstanding any change in
Compensation, until changed as permitted in this Paragraph 4.6 or Paragraph 4.5.
4.7 Suspension of Basic or Supplemental Contributions. A Contributing Participant may
suspend his Basic or Supplemental Contributions to the Plan by filing the appropriate Plan form
with the local administrator at least 15 days prior to the first day of the pay period for which such
suspension is intended to be effective. Suspension of Basic After-Tax Contributions shall not
prevent a Contributing Participant from continuing or increasing his Basic Pre-Tax Contributions
and suspension of Basic Pre-Tax Contributions shall not prevent a Contributing Participant from
continuing or increasing his Basic After-Tax Contributions.
4.8 Remittance of Contributions to Trustee. Basic Contributions and Supplemental
Contributions shall be remitted to the Trustee as soon as practicable after the end of the month in
which the payroll deductions, salary reductions or cash payments are effectuated, but in n~ event
later than 90 days from the date such contributions are received by the Employer (in the case of
Basic and Supplemental After-Tax Contributions) or the date on which such contributions would
otherwise have been paid to the Employee in cash (in the case of Basic and Supplemental Pre-
Tax Contributions). The aggregate amounts contributed hereunder, shall be employed by the
Trustee to make purchases for the Investment Fund or Funds in accordance with the respective
investment elections of each Contributing Participant for such pay period. All such contributions
shall be allocated to the accounts of each Participant established in accordance with Article VII.
4.9 Cessation of Contributions Made by a Contributing Participant. All Contributions of a
Contributing Participant shall cease effective with the first day of the pay period coincident with
following the date of:
(a) the timely filing of a notice of voluntary suspension of Basic
Contributions as described in Paragraph 4.7;
(b) the election to make certain withdrawals pursuant to Article X;
(c) the involuntary suspension of Basic Contributions because of a transfer in
employment or employment classification as described in subparagraph 3.4(b); or
(d) the termination of employment for any reason including Retirement, death
or Disability.
Notwithstanding the foregoing, subparagraph (b) shall not affect Basic Pre-Tax Contrib except as
provided in Paragraph 10.2.
4.10 Participant Rollover Contributions
(a) With the consent of the Committee, a Contributing Participant or an Employee described
in paragraph 3.1 (b) may contribute cash to the Trust Fund other than as Basic or Supplemental
Contributions provided such contribution constitutes a Rollover Contribution (as defined in
subparagraph (b) of this Paragraph). All Rollover Contributions to the Trust Fund shall be
allocated to the Contributing Participant’s or Employee’s account as of the Valuation Date
coincident with or lately preceding the date of the contribution. To the extent prohibited under
the Code, no Rollover Contribution, shall be allowed if the rollover amount is attributable
directly or indirectly to a trust or annuity forming part of a plan under which the Employee was a
5% owner at the time the distribution from such trust or annuity was made. For purposes of the
preceding sentence, a 5% owner shall mean any individual who was a 5% owner (within the
meaning of Section 416(i)(1)(B) of the Code) of the employer maintaining such other plan at any
time during the five plan years preceding the plan year in which the distribution is made. If a
Contributing Participant or an Employee described in subparagraph 3.1 (b) is permitted to make
such a Rollover Contribution, the Committee shall obtain such evidence, assurances or
certifications as it may deem necessary from such Contributing Participant or Employee to
establish to its satisfaction that the amounts to be contributed qualify as Rollover Contributions
within the meaning of subparagraph (b) immediately following and will not affect the
qualification of the Plan or the tax exempt status of the Trust Fund under Sections 401 (a) and
501 (a) of the Code, respectively, or substantially increase the administrative expenses of the
Plan. The amount so transferred must consist of cash distributed from such other plan or any
portion of the cash proceeds from the sale of distributed property other than cash, to the extent
permitted by Section 402(a) (6) (D) of the Code.
(b) Definition. As used in this Paragraph 4.10, the term “Rollover Contribution” shall mean
the following:
(i) all or any portion of a “qualified total distribution” (as said term is defined
in Section 402(a) (5) (E) (i) (I) and (II) of the Code inclusive of Section 402(a) (6) of the
Code, and, after December 31, 1984, including a rollover distribution attributable to a
trust forming part of a plan under which the Contributing Participant or Employee was an
employee within the meaning of Section 401(c)(1) at the time contributions were made
on his behalf) which is contributed to the Trust Fund within 60 days of receipt of the
distribution from a trust described in Section 401(a) of the Code and exempt from tax
under Section 501 (a) of the Code. A qualified total distribution shall not include any
amount considered to be contributed by the Contributing Participant or the Employee to
the qualified trust described above;
(ii) an amount (described in Section 408(d) (3) (A) (ii) or Section 409(b) (3)
(C) of the Code) which is contributed to the Trust Fund and represents all or any portion
of the amount of the Contributing Participant’s or Employee’s distribution from an
individual retirement account individual retirement annuity (defined in Sections 408(a)
and 408(b) of the Code, respectively) the value of which account or annuity is
attributable solely to a qualified total distribution received by such Contributing
Participant or Employee from a trust described in Section 401 (a) of the Code and exempt
from tax under Section 501 (a) of the Code, and which amount is contributed to the Trust
Fund within 60 days of the distribution from the Contributing Participant’s or
Employee’s individual account or annuity.
(c) Subject to subparagraph 4.10(d), in addition to the Rollover Contribution described in
subparagraphs (a) and (b), the Committee, in accordance with a uniform and nondiscriminatory
policy applicable to Contributing Participants and Employees described in subparagraph 3.1(b),
may direct the Trustee to accept a cash contribution transferred directly to the Trust Fund from
the trustee of another trust described in Section 401 (a) of the Code and exempt from tax under
Section 501 (a) of the Code on behalf of such Contributing Participant or Employee who
participated in that trust. Prior to the acceptance of such a contribution the Committee shall
obtain such evidence, assurances or certifications as it may deem necessary to establish to its
satisfaction that the amount to be contributed will not affect the qualification of the Plan or the
tax-exempt status of the Trust Fund under Sections 401 (a) and 501 (a) of the Code, respectively,
or substantially increase the administrative expenses of the Plan.
(d) Notwithstanding anything herein to the contrary, the Committee, pursuant to uniform and
nondiscriminatory guidelines established by it, shall not permit any direct or indirect transfers
from another trust described in Section 401 (a) of the Code and exempt from tax under Section
501 (a) of the Code, which provides for a life annuity form of payment to the Employee, other
than the trust under the Predecessor Plan.
ARTICLE V. EMPLOYER CONTRIBUTIONS
5.1 Employer Contributions. For each plan year, the Board of Directors, in its sole discretion
shall establish three profitability thresholds which are referred to herein as “Level A”, “Level B”
and “Level C”. The highest Profitability Level which is attained shall determine the Employer’s
contribution obligation to the Plan.
Subject to the provisions of Article XIV, each Employer shall contribute to the Trust Fund based
upon the Profitability Level attained in accordance with the following formula:
(a) Twenty-five cents for each one dollar of a Contributing Participant’s Basic Contributions
which are based on the first 8% of his Compensation, provided the Profitability Level is equal to
or above Level A but below Level B;
(b) Fifty cents for each e dollar of a Contributing Participant’s Basic Contributions which is
based on the first 8% of his Compensation provided the Profitability Level is equal to or above
Level B but below Level C;
(c) Seventy-five cents for each one dollar of a Contributing Participant’s Basic Contributions
which is based on the first 8% of his Compensation provided the Profitability Level is equal to or
above Level C.
No Employer Contributions shall be made with respect to a Contributing Participant’s Supple-
mental Contributions.
5.2 (a) Subject to Paragraph 5.7, the average contribution percentage for the Plan Year for
Highly Compensated Employees shall not exceed the greater of the following average
contribution percentage tests: (i) the average contribution percentage for such Plan Year of those
eligible Employees who are not Highly Compensated Employees multiplied by 1.25; or (ii) the
average contribution percentage for the Plan Year of those eligible Employees who are not
Highly Compensated Employees multiplied by 2.0, provided that the average contribution
percentage for Highly Compensated Employees does not exceed the average contribution
percentage for such other eligible Employees by more than 2 percentage points. For purposes of
this Article V, the “average contribution percentage” for a Plan Year means, for each specified
group of employees, the average of the ratios (calculated separately for each Employee in such
group) of (1) the sum of (A) Employer Contributions described in Section 5.1 for the Plan Year,
(B) Basic and Supplemental After-Tax Contributions for the Plan Year, and (C) if the Committee
so elects in accordance with and to the extent permitted by the Regulations, Basic and
Supplemental Pre-Tax Contributions, to (ii) the amount of the Participant’s compensation (as
defined in Section 414(s) of the Code) for the Plan Year. An eligible Employee’s average
contribution percentage shall be zero if no contributions are made on his behalf for such Plan
Year.(b) The Committee shall determine as of the end of the Plan Year, and at such time or times
in its discretion, whether one of the average contribution percentage tests specified in
subparagraph 5.2(a) is satisfied for such Plan Year, This determination shall be made after first
determining the treatment of excess deferrals within the meaning of Section 402(g) of the Code
under Paragraph 4.2 and then determining the treatment of excess contributions under
subparagraph 4.5(b). In the event that neither of the average contribution percentage tests is
satisfied, the Committee shall refund or forfeit the excess contributions in the manner described
in subparagraph 5.2(c). For purposes of this Article V, “excess aggregate contributions” means,
with respect to any Plan Year and with respect to any Participant, the excess of the aggregate
amount (and any earnings and losses allocable thereto) of (a) Employer Contributions, (b) Basic
and Supplemental After-Tax Contributions and (c) the Basic and Supplemental Pre-Tax
Contributions (if the Regulations permit and the Committee elects to take into account Basic Pre -
Tax Contributions when calculating the average contribution percentage) of Highly
Compensated Participants for such Plan Year, over the maximum amount of such Employer
Contributions, Basic and Supplemental After-Tax Contributions and Basic Pre-Tax
Contributions that could be made to the account of Participants without violating the
requirements of subparagraph 5.2(a). The amount of each Highly Compensated Participant’s
excess aggregate contributions shall be determined by reducing the average contribution
percentage of each Highly Compensated Participant whose average compensation percentage is
in excess of the percentage otherwise permitted under subparagraph 5.2(a) to the maximum
amount permitted by that paragraph.
(c) (i) If the Committee is required to refund or forfeit excess aggregate contributions for any
Highly Compensated Participant for a Plan Year in order to satisfy the requirements of subpara-
graph 5.2(a), then the refund or forfeiture of such excess aggregate contributions shall be made
with respect to such Highly Compensated Participants to the extent practicable before the 15th
day of the third month immediately following the Plan Year for which such excess aggregate
contributions were made, but in no event later than the end of the Plan Year following such Plan
Year or, in the case of the termination of the Plan in accordance with Article XIII, no later than
the end of the twelve-month period immediately following the date of such termination. For each
of such Participants, amounts so refunded or forfeited shall be made in the following order of
priority: (A) to the extent permitted by law, by forfeiting nonvested Employer Contributions, and
earnings thereon; (B) by distributing vested Employer Contributions, and earnings thereon, of
Highly Compensated Participants; (C) by distributing Supplemental or Basic After-Tax
Contributions, and earnings thereon; and (D) by distributing Supplemental or Basic Pre-Tax
Contributions (to the extent such amounts are included in the average contribution percentage)
and earnings thereon. All such distributions and forfeitures shall be made to or be with respect to
Highly Compensated Participants on the basis of the respective portions of such amounts
attributable to each such Highly Compensated Participant. The amount of any forfeitures made
pursuant to this Paragraph 5.2 shall be used to reduce Employer Contributions in accordance
with Paragraph 5.4(ii) If an eligible Highly Compensated Employee is subject to the family aggregation rules or
Section 414(q) (6) of the Code because such employee is either a five-percent owner or one of
the ten most Highly Compensated Employees, the combined actual contribution ratio for the
family group (which is treated as one Highly Compensated Employee) shall be the greater of:
(a) The actual contribution ratio determined by combining the Basic and
Supplemental After-Tax Contributions, Employer Contributions of all the eligible family
members who are highly compensated without regard to family aggregation, and (b) the
actual contribution ratio determined by combining the Basic and Supplemental After-Tax
Contributions, Compensation, Employer Contributions, and any amounts treated as
Employer Contributions of all the eligible family members.
If the amount determined under (a) of this Paragraph exceeds the amount determined under (b)
of this Paragraph, then it may be necessary, for purposes of correcting excess aggregate
contributions of the family members under (iii), to calculate an actual contribution ratio for the
group of eligible family members who are not highly compensated without regard to family
aggregation. This actual contribution ratio shall be determined by combining the Basic and
Supplemental After-Tax Contributions, Compensation, Employer Contribution and amounts
treated as Employer Contributions by all such employees.
The Basic and Supplemental After-Tax Contributions, Compensation and amounts treated as
Employer Contributions of all family members shall be disregarded for purposes of determining
the actual contribution percentage for the group of Highly Compensated Employees, and the
group of eligible Employees who are not Highly Compensated Employees.
If an Employee is required to be aggregated as a member of more than one family group in a
plan all eligible Employees who are members of those family groups that include that Employee
shall be aggregated as one family group.
(iii) The determination and correction of excess aggregate contributions of a Highly
Compensated Employee whose actual contribution ratio is determined under the family
aggregation rules of (ii) shall be accomplished as follows: If the actual contribution ratio of the
Highly Compensated Employee is determined under paragraph (a) of this section, then the actual
contribution ratio shall be reduced as required under subparagraph 5.2(b) and the excess
aggregate contributions for the family unit shall be allocated among the family members in
proportion to the Basic and Supplemental After-Tax Contributions and Employer Contributions
of each family member that are combined to determine the actual contribution ratio. If the actua l
contribution ratio of the Highly Comp Employee is determined under (b), then the actual
contribution ratio shall be reduced as required under subparagraph 5.2(b), but not below the
actual contribution ratio of the group of eligible Employees who are members of the family
group and are not highly compensated without regard to family aggregation. Excess aggregate
contributions shall be determined by taking into account the contributions of the family members
whose contributions were combined to determine the actual contribution ratio of the Highly
Compensated Employee under Paragraph (a), and shall be allocated among such family members
in proportion to each such family member’s Basic and Supplemental After-Tax Contributions
and Employer Contributions. If further reduction of the actual contribution ratio is required under
Paragraph 5.2(b), excess aggregate contributions resulting from this reduction shall be
determined by taking into account the contributions of all eligible family members and shall be
allocated among such family members in proportion to the Basic and Supplemental After-Tax
Contributions and Employer Contributions of each family member.5.3 Remittance of Employer Contributions to Trustee. Employer Contributions, if any, shall
be made solely in cash and shall be remitted to the Trustee, as soon as practicable after the end of
the year for which the Company’s Profitability Level was attained; provided, however, that
Employer Contributions to Fund E, may be made in shares of Common Stock of NL or in cash.
5.4 Allocation of Employer Contributions and Forfeitures. All Employer Contributions shall
be used by the Trustee to make purchases for the Investment Fund or Funds in accordance with
the respective investment elections of the Contributing Participant to whose account the
Employer Contributions are allocated. All Employer Contributions shall be allocated to the
accounts established in accordance with Article VII of each Participant entitled to share in such
contributions, Notwithstanding an provision of the Plan, no Employer Contributions shall be
made for the benefit of, and no Employer Contributions or forfeitures shall be allocated, added or
otherwise credited to the account of, a Participant under the Plan on or after the date on which he
terminates Service; provided, however, a Participant who terminated Service during any Plan
Year on his Retirement Date or by reason of his death or Disability shall be treated as if he was a
Contributing Participant on the last day of such Plan Year. Amounts in the accounts of
Participants which are forfeited in accordance with Article VIII and Paragraph 16.6 shall be
applied during the continuance of the Plan in the following order: (i) to restore the accounts of
reemployed participants pursuant to subparagraph 8.4(b), (ii) to restore the accounts of
Participants or Beneficiaries who apply for forfeited benefits pursuant to Paragraph 16.6 and (iii)
to reduce the amount of Employer Contributions otherwise payable by their Employer. If upon
complete discontinuance of contributions under the Plan or termination of the Plan any such
forfeiture have not been so applied, such unapplied amount shall be allocated among all
remaining Employees who are Participants in accordance with Paragraph 13.2.
5.5 Investment and Administrative Expenses. All brokerage commissions, taxes and other
expenses related to the purchase and sale of securities shall be paid out of the assets of the Trust
Fund, as directed by the Committee. All other expenses, including any taxes which may be
imposed upon the Trust Fund or upon the income therefrom, compensation of the Trustee,
investment management fees, fees for legal and accounting purposes and all other costs and
expenses incurred in administering the Plan, unless paid by the Employer, shall be paid out of the
Trust Fund, as directed by the Committee.
5.6 Multiple Use. (a) Notwithstanding any other provision under this Plan, in the event there is
multiple use, as defined and determined in accordance with Section 1.401(m)-2 of the
Regulations, such multiple use shall be corrected to the extent required by the Regulations by
reducing the actual contribution perce
